With the Virtual Pricing Director Pricing Espresso® we aim to bring you your pricing 'shot' - some of the most interesting, thought-provoking and informative material we can find globally which will be of interest, relevance and help to you in your firms' pricing challenges.
Don’t Blame Your Clients for Write-offs, and Growing Debtor Days – They’re Your Fault
Well, that’s a great way to alienate the audience before getting to the first paragraph. I thought about smoothing that title out a bit but, nah, let’s call it how we see it.
But first a vignette – after being in private legal practice for several years I agreed to serve on a cost complaints panel convened by the New Zealand Law Society which was charged with a statutory responsibility to deal with fee complaints from the public. This was 1984.
The law society delegated that responsibility to panels of experienced practitioners to adjudicate. After several years, I was asked to chair the panel. In that capacity I either personally adjudicated or signed off over 300 assessments. I upheld the fee in 93% of them. Indeed, in many cases, the fee was less than what I would have charged in my own firm or approved on assessment. Read more...
The £5 Billion Black Hole
Today’s article in Horizon by The Lawyer – ‘The leaves are falling, and so are profits’ noted what to most is now starkly clear, that reporting season was characterised by a “revenue up, profits down” narrative.
And no-one is picking the next two years to be anything but challenging as the revenue side dips and inflation and a tight labour market continue to grind margins to fine dust. Well, that’s perhaps an overstatement but, with apologies for the lazy overuse of metaphors on a Friday afternoon, at least the gloss will well and truly come off those profit lines.
So, what to do? Everyone knows the pack drill, cut costs, shrink the work force, and generally batten the hatches. Read more...
Big Law Facilitates Unreasonable Client Demands, Clients Say
Lawyers at all levels ranked unreasonable client demands among their top sources of stress and anxiety in a recent survey, but clients say high fees and a lack of pushback further the unhealthy dynamic.
Unreasonable and inhumane demands from clients are stressing lawyers out and damaging their mental and physical health, according to a recent American Lawyer survey on mental health in the legal profession.
In Big Law, half of roughly 2,500 attorneys surveyed said unreasonable client demands negatively impacted their mental well-being. A similar amount said clients were the reason they hardly or never took vacations, and more than half said they feel their clients don’t care about their mental health at all. Read more...
In Current Market, Billing Discipline 'More Critical Than Ever'
Sidley Austin's memo to associates about late time entries highlights that law firms are tidying up billing and collections procedures amid a slower demand environment.
Some large law firms are doubling down on billing discipline, as Big Law clients take longer to make payments and the legal industry continues to see demand declines.
Sidley Austin, for instance, told associates and counsel this month that it would reduce year-end bonuses by between 25% and 50% if they averaged more than five days to enter time, sources confirmed. Read more...
Bill, Baby, Bill ... But Don't Forget To Enter Your Time -- Or Else!
Don't let your bonus suffer -- enter your time ASAP.
I practiced law for nearly 15 years and hated timesheets as much as the next person. But it’s just critical it be done on a daily basis. So I’m not surprised law firms are being more aggressive in requiring it and penalizing people, especially in this associate market, which has shifted. Now, they might not have done it two years ago, where it was a seller’s market. But now the shoe is on the other foot.
Even if it makes a 1% difference in revenue or collections or profitability—when you’re looking at firms generating billions of dollars, that’s a lot of money. So yeah, I think in tougher times, they want people to really focus on the basics. And people might also have more time to focus on the basics because it’s not as crazy as it was in 2021. Read more...
High Salaries, Low Billables? Some Midlevel Biglaw Associates Have Got It Made
Some firms apparently wants to hang onto associates, no matter what.
How easy it is to do very little and still make a great living without getting fired.
— An anonymous Am Law 100 associate’s response to a question found in the American Lawyer Midlevel Associates Survey about what most surprised them about working at their current firm. More notable and quotable responses can be found here. Read more...
Big Law in September Will Raise Volume on Billing and Collections Push
Common billing reminders often begin in September, from managers asking partners in meetings to pledge what they think they're going to collect, to some managers going door-to-door in the office to discuss it.
Law firms’ ability to bring in revenue and profit growth in 2023 will hinge on how well they can bill and collect before the calendar turns. And law firms will likely start stepping up billing and collection efforts in September as the fourth quarter looms, analysts say, especially in light of demand declines in the industry this year. Read more...
Law Firms Struggling With Arcane Billing Guidelines Can Look To AI For Relief
AI may not be able to solve every legal problem, but it can get lawyers paid.
Over the last few years, in-house legal counsel have leaned on increasingly onerous “billing guidelines” for outside counsel. Clients scold Biglaw firms that the lawyers won’t see a penny until the bills comply with a hefty billing Bible of bilious demands. Clients claim it’s about controlling spend, but it feels more like an excuse to drag out collections with red tape.
And clients feel satisfied that they’ve micromanaged the lawyers… and lawyers just raise their rates to cover the overhead of all this frustration. Read more...
Injury lawyers fight fixed costs reforms through the courts
Personal injury lawyers have made good on their threat to challenge the fixed costs reforms in court by issuing judicial review proceedings.
The Association of Personal Injury Lawyers sent the government a formal letter before action last month and confirmed today it had formally issued a JR claim over several aspects of the plans to extend fixed costs.
The Gazette has contacted the Ministry of Justice to ask whether the legal action makes any difference to the intended 1 October start date for the new costs regime. Read more...
Fixed costs on most lower-value clin neg claims from April 2024
Fixed costs will be imposed on clinical negligence claims worth up to £25,000 from next April, the government announced today.
The intention is that the lower damages clinical negligence claim FRC (LDFRC) scheme will come into force through secondary legislation and after approval by the Civil Procedure Rule Committee. A further consultation will be launched on how disbursements will work under the proposed scheme.
Making the announcement, the Department of Health & Social Care said the annual expenditure on clinical negligence claims continues to rise and that legal costs represent a ‘sizeable proportion’ of this. Read more...